Oahu home prices drop to 2005 levels - News

oahu home sales will fall approximately 33% in november from last november. it will be the 14th straight month of year to year sales declines. about 1/4 of all homes selling these days, the seller is paying credits to the buyer and/or closing cost toward the buyer. there were 133 homes for sale in August that were "upside down". today there are close to 200. this number will increase over the next two years.

buyer's will have lots of opportunities to buy latter part of 2009 and into 2010. the deals will be 10 times greater. prices will drop to a median of $450k.

jumper wrote:

oahu home sales will fall approximately 33% in november from last november. it will be the 14th straight month of year to year sales declines. about 1/4 of all homes selling these days, the seller is paying credits to the buyer and/or closing cost toward the buyer. there were 133 homes for sale in August that were "upside down". today there are close to 200. this number will increase over the next two years.
buyer's will have lots of opportunities to buy latter part of 2009 and into 2010. the deals will be 10 times greater. prices will drop to a median of $450k.

...so you are predicting a drop from $620K to $450K in the next 12-14 months...a 28% drop, or about 2% per month. Too far, too fast. A huge market that surges into Hawaii is from the west coast, and I am talking about Manhattan Beach, Newport Beach, the Westside, Santa Monica, Pacific Palisades, and up through northern California, etc. etc...places that the downturn here does not translate readily into reduced consumption. They would see those kinds of drops that you posted as extraordinary opportunities to buy into Hawaii...if they don't already own there. Nah, too far, too deep a drop in a year. Caveat, if they don't reduce the foreclosures and stimulate the money supply into the middle classes soon...anything could happen. What just happened is the the large banks just sucked about $10Trillion out of the economy and are hoarding it, not lending as they promised, and Poulson lied through his teeth to get the money...if they don't clear this up fast, you might see your post come true. You never know.

...What is going to likely happen is this; and Hawaii businesses are going to hit the skids really fast if they are caught up in this..

"...One hope was that the U.S. would use some of the $700 billion financial bailout to buy shaky investments from banks and insurance companies. That was the original plan. But Treasury Secretary Henry Paulson has issued a stunning turnabout, saying the U.S. no longer planned to buy troubled securities. For those watching the wave of commercial defaults about to crest, the announcement was poorly received.

"He's created havoc in the marketplace by changing the rules," Rosen said. "It was the stupidest statement on Earth."

..."you can't steal in slow motion...!"

http://hosted.ap.org/dynamic/stories/M/MELTDO ...

typical bait and switch...in broad daylight...fast, all of this was in place before they got the money, ie- all the criminals were in place...and just ripped the money in one fell swoop, then went back for more...while everyone had the 'deer in the headlights" look of astonishment and incredulity on their faces..., so easy it is comical. yep, the politicians are all part of it...the large banks, the fed, the Bush administration...all of them. The Fed got started in 1913, on a Sunday night, in the dark...and there was no oversight...same thing here. Same related scam, different methods. They are good at what they do, I will give them that!

well...they crashed the article link...I 'll try and send it again...

"...
Nov 28, 4:45 AM EST

Meltdown far from over, new mortgage crisis looms
http://hosted.ap.org/dynamic/stories/M/MELTDO...

Hunting for holiday bargains won't be enough to stave off what's likely to become the next economic crisis. Malls from Michigan to Georgia are entering foreclosure, commercial victims of the same events poisoning the housing market.

Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages.

That pace is expected to quicken. The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies' credit.

"We're probably in the first inning of the commercial mortgage problem," said Scott Tross, a real estate lawyer with Herrick Feinstein in New Jersey.

That's bad news for more than just property owners. When businesses go dark, employees lose jobs. Towns lose tax revenue. School budgets and social services feel the pinch.

Companies have survived plenty of downturns, but economists see this one playing out like never before. In the past, when businesses hit rough patches, owners negotiated with banks or refinanced their loans.

But many banks no longer hold the loans they made. Over the past decade, banks have increasingly bundled mortgages and sold them to investors. Pension funds, insurance companies, and hedge funds bought the seemingly safe securities and are now bracing for losses that could ripple through the financial system.

"It's a toxic drug and nobody knows how bad it's going to be," said Paul Miller, an analyst with Friedman, Billings, Ramsey, who was among the first to sound alarm bells in the residential market.

Unlike home mortgages, businesses don't pay their loans over 30 years. Commercial mortgages are usually written for five, seven or 10 years with big payments due at the end. About $20 billion will be due next year, covering everything from office and condo complexes to hotels and malls.

The retail outlook is particularly bad. Circuit City and Linens 'n Things have sought bankruptcy protection. Home Depot, Sears, Ann Taylor and Foot Locker are closing stores.

Those retailers typically were paying rent that was expected to cover mortgage payments. When those $20 billion in mortgages come due next year - 2010 and 2011 totals are projected to be even higher - many property owners won't have the money.

Some will survive, but those property owners whose loans required little money up front will have less incentive to weather the storm.

Refinancing formerly was an option, but many properties are worth less than when they were purchased. And since investors no longer want to buy commercial mortgages, banks are reluctant to write new loans to refinance those facing foreclosure.

California, New York, Texas and Florida - states with a high concentration of mortgages in the securities market, according to Fitch - are particularly vulnerable. Texas and Florida are already seeing increased delinquencies and defaults, as are Michigan, Tennessee and Georgia.

The worst-case scenario goes something like this: With banks unwilling to refinance, a shopping center goes into foreclosure. Nobody can buy the mall because banks won't write mortgages as long as investors won't purchase them...."
continued in the link above...

very true

Now we are up to $8.5Trillion....and rising...

"...Wednesday, November 26, 2008 - 12:10 PM HAST
Bailouts, rescues, cash injections in U.S. economy total $8.5 trillion
Pacific Business News (Honolulu)- by Mike Sunnucks

Related News-

* Bailouts, rescues, cash injections in U.S. economy total $8.5 trillion
* Wells Fargo becomes nation’s largest bank based on stock-market value
* Citigroup weighs potential sale
* Report: Citigroup weighs potential sale


Federal bailouts, equity buys into banks and investment houses, liquidity infusions by the U.S. Federal Reserve Bank, loan guarantees and economic stimulus checks now total $8.5 trillion, according to various estimates.

That equates to about 60 percent of U.S. gross domestic product, which will come in around $14 trillion, according to economists.

The $8.5 trillion total in bailouts is nearly twice the size of annual GDP in Japan and accounts for more than the annual GDP of every national economy except the U.S., European Union and China, according to federal data.

The $8.5 trillion includes the $700 billion bank and Wall Street bailout; federal takeovers of Fannie Mae and Freddie Mac; individualized bailouts for Citigroup and American International Group; and various cash infusions into financial and lending markets by the Fed. The $700 billion includes federal equity buys into Bank of America Corp., JP Morgan Chase & Co., Goldman Sachs Group Inc. and other financial institutions.

The total was determined by various economic analysts as well as the San Francisco Chronicle.

-from PBN

hawaii medians moving to $450k is just my opinion.

when the market was hot in 2004 and 2005, it was not uncommon to have over 400 sales per month and inventory levels at about 900 homes for sale.

today we have about 200 sales per month (50% decrease from 2004 -2005) and 2,200 single family homes are currently on the market (244% increase from 2004-2005)

in a nut shell, supply is rising and demand is falling. both at alarming rates.

crappy part, i'm one of those who bought in 2005. but hey... that's life.

jumper wrote:

hawaii medians moving to $450k is just my opinion.
when the market was hot in 2004 and 2005, it was not uncommon to have over 400 sales per month and inventory levels at about 900 homes for sale.
today we have about 200 sales per month (50% decrease from 2004 -2005) and 2,200 single family homes are currently on the market (244% increase from 2004-2005)
in a nut shell, supply is rising and demand is falling. both at alarming rates.
crappy part, i'm one of those who bought in 2005. but hey... that's life.

\
As long as you can afford the monthly payment, you will be fine, unless you wanted to sell int eh next 5-8 years....maybe. I think that inflation has to hit us pretty hard with all of this creation of money....once it gets monetized, it pretty much has to get into everything out thee...food, energy, housing, salaries, you name it. Nothing like this has ever happened before, and they have Volcker in there to crack down on the incoming inflation. I think in 5-8 years, your homes prices have a 50/50 chance of doubling in price...IF they get this economy moving...Obama and the Dems will do it, you can count on that...they will spend like there is no tomorrow...and they should. Hold on to your home, what looks bad today will look great in the not too distant future. Just be patient. And if it doesn't then just enjoy where you live in the meantime. The dollar is trash...after this thing gets worked out in 2-3 years, people are gonna dump the dollar like never before. But time will tell.

jumper wrote:

oahu home sales will fall approximately 33% in november from last november.

A 33% drop year over year? Oahu MEDIAN? Care to make a wager? If it weren't for your ability to make semi-coherent sentences, I'd say you were Rayem.

jumper wrote:

about 1/4 of all homes selling these days, the seller is paying credits to the buyer and/or closing cost toward the buyer.

People were asking too much for their homes. Plain and simple. Even today, many sellers are asking for too much. That doesn't mean the market is crashing. I could over-price my home and offer all the credits in the world... what's the point? And any island-wide median will be dragged down by homes in West Oahu which are currently taking a big fat dump (as expected). And don't forget all the leasehold properties in town... Some leases are renegotiating at 500%+ their old lease rent. As a result, those home prices are crashing through the floor. These leasehold prices are also included in the median... so they will drag down prices even though home prices are not losing value. Buying leasehold property is like buying a long term rental contract on a home - you technically own NOTHING. And in town, leasehold represents one quarter of all properties.

jumper wrote:

hawaii medians moving to $450k is just my opinion.
when the market was hot in 2004 and 2005, it was not uncommon to have over 400 sales per month and inventory levels at about 900 homes for sale.
today we have about 200 sales per month (50% decrease from 2004 -2005) and 2,200 single family homes are currently on the market (244% increase from 2004-2005)
in a nut shell, supply is rising and demand is falling. both at alarming rates.
crappy part, i'm one of those who bought in 2005. but hey... that's life.

Care to share what area you bought in and what price you paid?

There are 2,086 active listings as of today. During the heyday, there were about 1,000. This is a 109% increase. You came up with a 244% increase. Hmmmmm.... You know people that come up with that kind of silliness... they have an agenda. Then... the doomsday data you posted was from September. Funny, because we're at the end of November now and the already old October data was much rosier. But again, you obviously have an agenda.

There is nothing "alarming" about the rate of sales or number of new listings. Your tone, however is quite alarming... How about renaming yourself to "doomsday prognosticator". It's much more fitting.

Guru wrote:

<quoted text>\
As long as you can afford the monthly payment, you will be fine, unless you wanted to sell int eh next 5-8 years....maybe. I think that inflation has to hit us pretty hard with all of this creation of money....once it gets monetized, it pretty much has to get into everything out thee...food, energy, housing, salaries, you name it. Nothing like this has ever happened before, and they have Volcker in there to crack down on the incoming inflation. I think in 5-8 years, your homes prices have a 50/50 chance of doubling in price...IF they get this economy moving...Obama and the Dems will do it, you can count on that...they will spend like there is no tomorrow...and they should. Hold on to your home, what looks bad today will look great in the not too distant future. Just be patient. And if it doesn't then just enjoy where you live in the meantime. The dollar is trash...after this thing gets worked out in 2-3 years, people are gonna dump the dollar like never before. But time will tell.

Yup, cash will be trash in the near future. Our govt has effectively added on an additional $8.3 TRILLION in debt in the last quarter. Add that to the other $11 TRILLION... we'll be at over 20 TRILLION by the end of the year. To put that into perspective, that's $185,000 for every single household in this country. The average household net worth (January 2008) in the US is $377,000 - that includes the value of every conceivable thing owned by every conceivable human (incl businesses) in the entire US. So think about that for just a second...

Average household net worth -$377,000
Govt debt WE owe -$185,000

What American families/businesses/etc actually "own" -$192,000 per household.

BUT WAIT, the net worth average is from January of this year when the market was over 14,000. The stock market has plummeted 45% since, wiping out $13 TRILLION in net worth. That is $116,000 per household.

AND, housing, nationwide, has fallen 14% since then, wiping out another $8 TRILLION or $71,000 per household.

OK, so where are we now?

$192,000 net worth after govt debt
$76,000 net worth after stock market crash
$5,000 net worth after housing correction

$5,000. That's it... If the govt slapped on even one TRILLION in additional debt, THE US AS A COUNTRY NO LONGER OWNS ANYTHING. WE ARE IN DEBT AND OWN NOTHING. NOTHING. ZIP. NADA. COMPLETELY WORTHLESS.

The only way to prevent this from happening is making sure deflation is short lived and inflation goes THROUGH THE ROOF in the coming years because that's the only way this debt will ever be paid back.

You can wait for home prices to "bottom"... but I wouldn't try timing it. When people start bailing out of treasuries... it will happen fast and furious. Wait and see........

Can I buy a house for my daughter Jenny now????????

yawn. Sounds like da PJ doll is startin' to panic

Harm Ha wrote:

Can I buy a house for my daughter Jenny now????????

I dunno...can u?

No mo money, no can buy anyting. Gotta go Aala Park moi moi.

No mo house, no mo 5 cents, go Aala Park moi moi.

Alfred Apaka no ka oi.

jumper wrote:

oahu home sales will fall approximately 33% in november from last november. it will be the 14th straight month of year to year sales declines. about 1/4 of all homes selling these days, the seller is paying credits to the buyer and/or closing cost toward the buyer. there were 133 homes for sale in August that were "upside down". today there are close to 200. this number will increase over the next two years.
buyer's will have lots of opportunities to buy latter part of 2009 and into 2010. the deals will be 10 times greater. prices will drop to a median of $450k.

When home sales are historic lows, the median price for the island of Oahu is not a good indicator. Just a few homes from higher-end neighborhood can skew the median as we are seeing today, and in the coming months ahead. But we already know that many homes are discounted over 30%, yet the median hardly budge.

Median price by neighborhood is a better indicator as long as there are enough samples. Most neighborhoods will fall this month, and will continue to tank.

I do agree that as sales continue to fall, islandwide median price will follow.

...the last 4 posts are the parasite trolls...they ruin every blog. they have nobody to talk to,nobody wants to talk to them, and they can't even talk to each other or themselves... so they sit here all day long and try to crash every blog and its blah, blah, blah...and NOTHING intelligent to say. Blah.

Ummmm...u just described yerself, hon.

keep dropping... moving back to hawaii nei??